What is an Asset Protection Trust?
An Asset Protection Trust or Nevada self-settled spendthrift trust is an irrevocable trust that is set up by an individual or business to protect their current or future assets from unforeseen future creditors. These self-settled spendthrift trusts are available in only a limited, but growing, number of states, Nevada being one of them. An Asset Protection Trust, usually appeals to professionals, such as physicians, attorneys, accountants, dentists, real estate agents, chiropractors, contractors, insurance agents, business owners and similar professionals that are exposed to a substantial degree of professional liability and desire to protect their accumulated wealth or young professionals who want to be proactive in protecting their assets as they grow.
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The Unique Advantages of an Asset Protection Trust
Short Two Year Statute of Limitations
Most other states that have enacted asset protection legislation require a four year statue of limitations before your asset protection goes into force, Nevada is currently the only state that has the short two year statue, which means peace of mind is provided in half the time to the individual or business creating the trust.
A Broader Range of Creditor Protection
Nevada is also the only state that includes ex-spouse and child support creditors in those who may not gain access to protected assets in an Asset Protection Trust, an incredibly significant benefit; as is the Nevada protection afforded against pre-existing tort creditors, which is also not available under legislation in many of the other states.
More Secure and Flexible Than Offshore Options
Offshore irrevocable trust accounts have been used for many years as a means to protect assets, however, changes in IRS regulations and the risks involved with international transactions have made these options less desirable than they once were. The lower administrative fees and setup costs, along with added flexibility, of Asset Protection Trust has decreased the draw of trusts created in foreign jurisdictions.
Available to Non-residents
You do not need to reside or do business in Nevada in order to take advantage of an Asset Protection Trust. The provisions of the Spendthrift Trust Act of Nevada will apply as long as at least one qualified trustee (such as Provident) has powers that include the maintenance of records and the preparation of trust income tax returns, and all or part of the trust’s administration is carried out in Nevada; or, some or all of the assets placed in the trust are located in Nevada.
Flexible Tax Considerations
A Nevada self-settled spendthrift trust may be drafted to be a completed gift for income tax purposes, or instead, as an incomplete gift, by including particular powers of appointment. An Asset Protection Trust also has the option of filing its own tax returns and pay its own tax or instead may be a grantor trust, with all income reportable on the grantor’s IRS Form 1040.
An Asset Protection Trust is not meant to be a means to hide assets from current creditors and is not a guarantee against bankruptcy judgments. However, under Nevada law, no suit can be brought against a transfer of property to a Nevada self-settled spendthrift trust, unless the creditor can prove that the transfer was a fraudulent transfer or was “otherwise wrongful as to the creditor.” Furthermore, proof by one creditor that the transfer of a specific asset was fraudulent or wrongful does not constitute proof as to any other creditor or any other transfers of assets.
“Provident Trust Group has grown to over 30,000 clients with over $3 billion in assets currently in custody. Both internationally and across the U.S., clients and their teams of financial advisors have placed their confidence in us, which assures a strong foundation for the present and the future.”
The Provident Advantage
Personalized, timely service is something our clients have found they can rely on with Provident. Regardless of your holdings with Provident, you can count on this same discreet and individualized service in regards to all your accounts.
Provident is owned and operated by a team of tax attorneys and highly qualified professionals who understand the legal intricacies related to Asset Protection Trusts, as well as asset protection trusts in other states and offshore. We can provide you and your advisors with the information necessary to make a fully informed decision.
All it takes is a phone call, to begin your relationship with the professionals at Provident, though we’d be happy to meet you in person at our Las Vegas office as well.
Give us a call at (888) 855-9856. We’d be happy to answer your questions related to setting up an Asset Protection Trust to help protect the assets you have worked so hard to acquire.